Sewickley, PA February 10, 2006—Background: This week, the Printing Industries of America/Graphic Arts Technical Foundation (PIA/GATF) filed official comments noting concerns about the U.S. Securities and Exchange Commission’s Notice of Proposed Rulemaking (File No. S7-10-05) that would permit the replacement of the current paper-based proxy materials process with an electronic system of notification and balloting. Under this proposed rule, companies could choose to provide shareholders with annual reports and proxy voting materials electronically, rather than by postal-mailed, paper-based copies, and could offer shareholders the option to receive the appropriate information on paper only if requested.
The following statement is from Michael Makin, President and CEO of PIA/GATF:
“Printing annual reports and proxy materials accounts for a huge volume of work produced by our industry, which employs more than 1.2 million workers nationwide. As an industry, we are concerned not only about the negative impacts this proposed rule could have on the jobs associated with printing, but with the harm it could bring to our vendors and suppliers as well.
We’re also concerned with the workability of this proposed rule, as those shareholders without Internet access may be disenfranchised from the electronic notification and balloting process. Senior citizens may be adversely affected, as research varies widely as to the online user status of this group. Additionally, shareholders who are more confident with the reliability, privacy, and safety of receiving personal financial information on paper could be forced to forgo this reliance.
While print is an industry that embraces technology, we believe the SEC should strike an appropriate balance between the desires of the companies wishing to provide e-annual reports and proxy material with the impact that will hit hard the companies we represent, while also considering shareholder choice in the equation. The proposed rule as written goes too far in the direction of technology for technology’s sake.
PIA/GATF looks forward to working with the SEC going forward to provide continued suggestions on how to accomplish the proposed rule’s objectives in a way would be less destructive to the printing industry.”